Saudi Arabia Explores Rafale Fighter Jets Amid Eurofighter Typhoon Setback

Saudi Arabia is engaged in negotiations with French aircraft manufacturer Dassault Aviation to procure the Rafale fighter jet, following challenges in acquiring the Eurofighter Typhoon from Germany. If the deal materializes, Saudi Arabia will bolster its air force with a diverse fleet, including the Rafale, Boeing F-15 SA, and Eurofighter Typhoons, posing a setback to the UK's BAE Systems.

Dassault Aviation's CEO, Eric Trappier, confirmed ongoing negotiations, marking a significant departure as Saudi Arabia traditionally sourced its war jets from the US and the UK. The move comes after Germany, part of the Eurofighter consortium, blocked the sale of Typhoon to Saudi Arabia, citing human rights concerns.

The potential Rafale deal would position Saudi Arabia among the select few air forces operating a varied range of warplanes. The shift may impact BAE Systems' business, given Saudi Arabia's historical association with the UK defense contractor.

This development underscores the geopolitical complexities influencing defense deals and highlights the Rafale's rising export profile, securing its position in the Middle East fighter jet market. As Saudi Arabia navigates its modernization efforts, the outcome of these negotiations will shape the dynamics of the region's military capabilities.

Cherming eyes growth in Mid East and Asia

LONDON — British-based Chemring, which produces munitions countermeasures, managed to grow its non-NATO business on the back of a huge rise in munitions sales in the Middle East and Asia, the company announced as it rolled out 2011 results on Jan. 24.

With austerity measures reducing defense spending across the alliance, Chemring said it is succeeding in building its non-NATO order book, but the downturn is threatening further rationalization in its key U.S. business, the company said.

Companies’ abilities to grow their businesses outside of depressed North American and European markets will likely be a growing theme as they turn to burgeoning spending in South America, the Middle East and Asia.

“The continuing problems of the Eurozone and the impact of possible sequestration in the U.S. indicate that our traditional markets will not be any easier this year. We continue to pursue our policy of reducing our dependence on these markets,” Chemring chairman Peter Hickson said in a statement.

Chemring reckons there will be a boom in the South Asia market until at least 2015 and says the major economies in South America will see defense budgets grow between 6 and 16 percent a year. The Middle East will see a 3.5 percent rise in defense budgets until 2015, Chemring said

“It’s encouraging to note that 44 percent of today’s order book emanates from non-NATO markets, compared with 33 percent at the same time last year,” Hickson said.

Overall, the company-reported revenues rose 25 percent to 745 million pounds ($1.16 billion). Non-NATO revenues rose 81 percent to 29 percent of total revenue compared with 20 percent in the previous year. Organic growth accounted for 9 percent of the total revenue growth.

Underlying profit before tax was up 6 percent to 125 million pounds ($194 million) even though the company reported pressure on margins across all of its business sectors.

It wasn’t all good news in the non-NATO markets, though. Chemring had to rely on a 216 percent rise in munitions sales to the Middle East and Far East to achieve its figures with countermeasures and pyrotechnics, both registering hefty reductions across the regions.

The company said it is looking to form a countermeasures joint venture in Saudi Arabia later this year and is looking for a similar arrangement in Brazil in a non-specified sector.

The picture is not so positive in its principal market. Chemring said it is looking at further possible rationalization of its business in the U.S.

The company closed an Alloy Surfaces countermeasures plant in the U.S. last year with the loss of 120 jobs and said it was reviewing further site rationalization at Alloy and Niitek, its strong growing counter-IED business.

Chemring was hard hit by a 31 percent slump in helicopter and transport-aircraft flares demand from NATO nations. The reduction was more severe than anticipated, said the company.

The U.S. markets accounted for 43 percent of Chemring revenues last year.

Oman seeks Bid for Euro-fighter

The government of Oman has requested that BAE Systems submit a formal bid for the supply of Typhoon fighter aircraft. The move clarifies the Middle East nation’s continuing commitment to the program following delays in completing negotiations.

A spokeswoman for the U.K.-based defense company said it expected to complete negotiations by the end of the year, with deliveries of the first aircraft taking place 36 months later.

The request for proposals involves a squadron’s worth of Tranche 3 standard aircraft — about 12 airframes — a support package and training for the Omani air force.

Last month, Oman ordered a second batch of 12 F-16 Block 50’s from Lockheed Martin in a $600 million deal

The Omanis formally stated their intention to purchase the Eurofighter Typhoon in early 2010, and company executives said at the time that the deal could be ready for signing within months.

In a statement, BAE said it welcomed the release of the request for proposals, adding that the news underpins its long-standing defense and security relationship with the sultanate as a major equipment supplier.

The most recent major equipment sale was signed in 2007 to deliver three corvettes to the Omani navy in a deal valued at 400 million pounds.

The warships remain undelivered for technical reasons.

The first of the Khareef-class vessels should have been handed over in 2010 but have been delayed following the discovery of technical problems during sea trials.

The spokeswoman denied that the signing of the fighter deal between the two sides is dependent on the agreement of a get-well package for three corvettes.

The spokeswoman said the first of the corvettes is now scheduled to be handed over at the end of the second quarter.

The Omanis’ commitment to Typhoon follows recent competition losses for the fighter in Japan and Switzerland.

A decision by India on whether to select the Eurofighter aircraft or its French rival, Dassault Rafale, is imminent.

Earlier this month, BAE announced that talks with the Middle East’s first Typhoon customer, Saudi Arabia, over amendments to a deal to supply 72 fighters, were dragging on and would likely affect its 2011 earnings.

The original deal called for the first 24 aircraft to be delivered from the BAE production line in the U.K., with subsequent assembly in Saudi Arabia.

BAE and the Saudis announced a change of plan last February over where the final 42 aircraft would be built but are still haggling over the details.

Typhoon is a four-nation program involving the Germany, Italy, Spain and the U.K. So far, it has exported the aircraft to Austria and Saudi Arabia

Regional 'Tensions' Delay U.S.-Israel Drill

JERU.S.ALEM - Israel and the United States opted to delay a major joint military exercise because of regional tensions and instability, Israeli Foreign Minister Avigdor Lieberman said on Jan. 16.

"The entire world understands that we had to postpone this exercise because of political and regional uncertainties, as well as the tensions and instability prevailing in the region," Lieberman told public radio.

"It's only a delay, the exercise will take place by the end of the year," he added, speaking from Warsaw where he was on an official visit.

Speaking in Jerusalem at an Independence faction meeting, Defence Minister Ehud Barak noted later that talks with the U.S. on postponing the exercise had began a month ago.

"In recent days, we reached the conclusion that it would be right to postpone it, this will enable us to better prepare for it," he said in comments relayed by his office.

He added that the drill will probably take place in the second half of2012, and constitutes "another layer of our deep and important security ties with the U.S."

On Jan. 15, a senior Israeli security official confirmed that the exercise, codenamed "Austere Challenge 12," which had been scheduled for spring, was now being put back to late 2012.

The joint maneuver was to have been the biggest yet between the two allies and was seen as an opportunity to display their joint military strength at a time of growing concern about Tehran's nuclear ambitions. But it was to come at a time of rising tensions over Iran's nuclear program, which Israel, Washington and much of the international community believe masks a weapons drive.

The United States is seeking tough new sanctions against Tehran, including its oil exports and financial institutions, and Iran has responded by threatening to close the strategic Strait of Hormuz.

On Jan. 15, two Israeli officials questioned whether the international community, and the United States in particular, were pushing hard enough for new sanctions.

Lieberman on Jan. 16 also called for speedier action, saying now "is the time for the international community to move from words to actions."

And Prime Minister Benjamin Netanyahu warned that the current regime of EU and U.S. sanctions are not enough to force Tehran to halt its nuclear program.

"As long as there won't be real and effective sanctions against Iran's petroleum industry and central bank, there will be no real effect on Iran's nuclear program," Netanyahu told MPs at a parliamentary committee on Jan. 16, with his remarks transmitted by a spokesman.

But Barak warned against publicly criticizing the U.S. on its course of action against Iran.

"On sanctions and the preparations for other options that could become relevant, this administration is definitely acting much more than in the past," he told his faction members.

"Alongside the mutual respect in the (U.S.-Israel) discourse, and alongside respecting each other's freedom of decision, I think we need to speak clearly in closed chambers, and publicly be careful about respecting the other, and refrain from public criticism of a government that at the end of the day sees things similarly to us, and is acting to stop Iran from becoming nuclear," he said.

Asked about the possibility of an Israeli attack on Iranian nuclear facilities, Lieberman said it was not for Israel "to take on a mission that is one for the international community, but it must keep all options on the table."

"Iran is not a threat to Israel alone. For the Gulf countries, Iran is also problem number one," he said. "Iran has taken control of Iraq and wants to do the same in Saudi Arabia to be able to dictate energy policy in the whole world."

Lieberman also accused Tehran of aiding Syrian President Bashar al-Assad's crackdown on pro-democracy activists, saying his regime "wouldn't last a week without Tehran's help."

Israel has made no secret of its desire to see crippling sanctions imposed on Iran in a bid to halt its nuclear program, which Tehran insists is for civilian energy and medical purposes alone. But it has also kept open the possibility of military action to prevent Iran obtaining a nuclear weapon.

Israel has been linked in media reports to both a computer worm that setback the nuclear program and a string of assassinations of Iranian nuclear scientists.

Would the US be defeated in the Persian Gulf in a War with Iran?

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Soldiers attend Iranian massive naval maneuvers dubbed Velayat 90 on the Sea of Oman, Iran, Dec. 28, 2011. The naval drills cover an area of 2,000 km stretching from the east of the Strait of Hormuz in the Persian Gulf to the Gulf of Aden.

(Xinhua/Stringer/Ali Mohammadi)

After years of U.S. threats, Iran has started to take very public steps to demonstrate that it is willing and capable of closing the Strait of Hormuz. On December 24, 2011 Iran started its Velayat-90 naval drills in and around the Strait of Hormuz and extending from the Persian Gulf and Gulf of Oman (Oman Sea) to the Gulf of Aden and Arabian Sea in the Indian Ocean. Since these drills took place there has been a growing war of words between Washington and Tehran. Nothing the Obama Administration or the Pentagon had done or said deterred Tehran from continuing the naval drills.

The Geo-Political Nature of the Strait of Hormuz

Besides the fact that it is a vital transit point for global energy resources and a strategic chokepoint, two additional things should be noted in regards to the Strait of Hormuz’s relationship to Iran. The first point is about the geography of the Strait of Hormuz. The second point is about the role of Iran in co-managing the strategic strait on the basis of international law and its sovereign rights.

Source : http://www.marketoracle.co.uk

The maritime traffic that goes through the Strait of Hormuz has always been in contact with Iranian naval forces, which are predominately composed of the Iranian Regular Force Navy and the Iranian Revolutionary Guard Navy. In fact, Iranian naval forces monitor and police the Strait of Hormuz along with the Sultanate of Oman via the Omani enclave of Musandam. More importantly, to go through the Strait of Hormuz all maritime traffic, including the U.S. Navy, sails through Iranian territory. No country can enter the Persian Gulf and transit the Strait of Hormuz without sailing through Iranian waters and territory. Almost all entrances into the Persian Gulf are made through Iranian waters and most exits are through Omani waters.

Iran allows foreign ships to use its territorial waters in good faith and on the basis of Part III of the United Nations Convention of the Law of the Sea’s maritime transit passage provisions that stipulate that vessels are free to sail through the Strait of Hormuz and similar bodies of water on the basis of speedy and continuous navigation between an open port and the high seas. Although Tehran in custom follows the navigation practices of the Law of the Sea, Tehran is not legally bound by them. Like Washington, Tehran signed this international treaty, but never ratified it.

American-Iranian Tensions in the Persian Gulf

Now the Iranian Majlis (Parliament) is re-evaluating the use of Iranian waters at the Strait of Hormuz. Legislation is being proposed by Iranian parliamentarians to block any foreign warships from being able to use Iranian territorial waters to navigate through the Strait of Hormuz without Iranian permission; the Iranian Parliament’s National Security and Foreign Policy Committee is currently studying legislating this as an official Iranian posture on the basis of Iranian strategic interests and national security. [1]

On December 30, 2011, the U.S.S. John C. Stennispassed through the area where Iran was conducting its naval drills. The Commander of the Iranian Regular Forces, Major-General Ataollah Salehi, advised the U.S.S.John C. Stennis and other U.S. Navy vessels not to return to the Persian Gulf while Iran was doing its drills, saying that Iran is not in the habit of repeating a warning twice. [2] Shortly after the stern Iranian warning to Washington, the Pentagon’s press secretary responded by making a statement saying: “No one in this government seeks confrontation [with Iran] over the Strait of Hormuz. It’s important to lower the temperature.” [3]

In an actual scenario of military conflict with Iran it is very likely that U.S. aircraft carriers would actually operate from outside of the Persian Gulf and from the southern Gulf of Oman and the Arabian Sea. Unless the missile systems that Washington is erecting in the petro-sheikhdoms of the southern Persian Gulf are fully capable and active, the deployment of large U.S. warships may be unlikely in the Persian Gulf. The reasons for this are tied to geographic realities and the defensive capabilities of Iran.

Geography is against the Pentagon: U.S. Naval Strength has limits in the Persian Gulf

U.S. naval strength, which predominately includes the U.S. Navy and the U.S. Coast Guard, essentially has primacy over all the other navies and maritime forces in the world. Its deep sea or oceanic capabilities are unparalleled or unmatched by any other naval power. Nevertheless, primacy does not mean invincibility. U.S. naval forces in the Strait of Hormuz and the Persian Gulf are very vulnerable to Iran.

Despite its might and shear strength, geography literally works against U.S. naval power in the Strait of Hormuz and the Persian Gulf. The relative narrowness of the Persian Gulf makes it like a channel, at least in a strategic and military context. Figuratively speaking, the aircraft carriers and warships of the U.S. are confined to narrow waters or are closed in within the coastal waters of the Persian Gulf.

This is where the Iranian military’s advanced missile capabilities come into play. The Iranian missile and torpedo arsenal would make short work of U.S. naval assets in the waters of the Persian Gulf where U.S. vessels are constricted. This is why the U.S. has been busily erecting a missile shield system in the Persian Gulf amongst the Gulf Cooperation Council (GCC) countries in the last few years.

Even the small Iranian patrol boats in the Persian Gulf, which appear pitiable and insignificant against a U.S. aircraft carrier or destroyer, threaten U.S. warships. Looks can be deceiving; these Iranian patrol boats can easily launch a barrage of missiles that could significantly damage and effectively sink large U.S. warships. Iranian small patrol boats are also hardly detectable and hard to target.

Iranian forces could also attack U.S. naval capabilities merely by launching missile attacks from the Iranian mainland on the northern shores of the Persian Gulf. Even in 2008 the Washington Institute for Near East Policy acknowledged the threat from Iran’s mobile coastal missile batteries, anti-ship missiles, and missile-armed small ships. [4] Other Iranian naval assets like aerial drones, hovercraft, mines, diver teams, and mini-submarines could also be used in asymmetrical naval warfare against the U.S. Fifth Fleet.

Even the Pentagon’s own war simulations have shown that a war in the Persian Gulf with Iran would spell disaster for the United States and its military. One key example is the Millennium Challenge 2002 (MC02) war game in the Persian Gulf, which was conducted from July 24, 2002 to August 15, 2002 and took almost two years to prepare. This mammoth drill was amongst the largest and most expensive war games ever held by the Pentagon. Millennium Challenge 2002 was held shortly after the Pentagon had decided that it would continue the momentum of the war in Afghanistan by targeting Iraq, Somalia, Sudan, Libya, Lebanon, Syria, and finishing off with the big prize of Iran in a broad military campaign to ensure U.S. primacy in the new millennium.

After Millennium Challenge 2002 was finished, the war game was presented as a simulation of a war against Iraq under the rule of President Saddam Hussein, but this cannot be true. [5] The U.S. had already made assessments for the upcoming Anglo-American invasion of Iraq. Moreover, Iraq had no naval capabilities that would merit such large-scale use of the U.S. Navy.

Millennium Challenge 2002 was conducted to simulate a war with Iran, which was codenamed “Red” and referred to as an unknown Middle Eastern rogue enemy state in the Persian Gulf. Other than Iran, no other country could meet the perimeters and characteristics of “Red” and its military forces, from the patrol boats to the motorcycle units. The war simulation took place because Washington was planning on attacking Iran soon after invading Iraq in 2003.

The scenario in the 2002 war game started with the U.S., codenamed “Blue,” giving Iran a one-day ultimatum to surrender in the year 2007. The war game’s date of 2007 would chronologically correspond to U.S. plans to attack Iran after the Israeli attack on Lebanon in 2006, which was suppose to expand into a broader war against Syria too. The war against Lebanon, however, did not go as planned and the U.S. and Israel realized that if Hezbollah could challenge them in Lebanon then an expanded war with Syria and Iran would be a disaster.

In Millennium Challenge 2002’s war scenario, Iran would react to U.S. aggression by launching a massive barrage of missiles that would overwhelm the U.S. and destroy sixteen U.S. naval vessels – an aircraft carrier, ten cruisers, and five amphibious ships. It is estimated that if this happened in reality, more than 20,000 U.S. servicemen would have been dead after the attack within a single day. [6] Next, Iran would send its small patrol boats – the ones that look insignificant in comparison to theU.S.S. John C. Stennis and other large U.S. warships – to overwhelm the remainder of the Pentagon’s naval forces in the Persian Gulf, which would result in the damaging and sinking of most of the U.S. Fifth Fleet and the defeat of the United States. After the U.S. defeat, the war games were started over again, but “Red” had to operate under handicapping restraints so that U.S. forces would be allowed to emerge victorious from the drill. [7] This would hide the reality of the fact that the U.S. would be overwhelmed as an outcome of a conventional war with Iran in the Persian Gulf.

Hence, the formidable naval power of Washington is handicapped by geography coupled with Iranian military capabilities when it comes to fighting Tehran in the Persian Gulf or even in much of the Gulf of Oman. Without open waters, like in the Indian Ocean or the Pacific Ocean, the U.S. will have to fight under significantly reduced response times and, more importantly, will not be able to fight from a stand-off (militarily safe) distance. Thus, entire tool boxes of U.S. naval defensive systems, which were designed for combat in open waters using stand-off ranges, are rendered unpractical in the Persian Gulf.

Making the Strait of Hormuz Redundant to Weaken Iran?

The entire world knows the importance of the Strait of Hormuz and Washington and its allies are very well aware that the Iranians can militarily close it for a significant period of time. This is why the U.S. has been working with the GCC countries – Saudi Arabia, Qatar, Bahrain, Kuwait, Oman, and the U.A.E. – to re-route their oil through pipelines bypassing the Strait of Hormuz and channelling GCC oil directly to the Indian Ocean, Red Sea, or Mediterranean Sea. Washington has also been pushing Iraq to seek alternative routes in talks with Turkey, Jordan, and Saudi Arabia.

Both Israel and Turkey have also been very interested in this strategic project. Ankara has had discussions with Qatar about setting up an oil terminal that would reach Turkey via Iraq. The Turkish government has attempted to get Iraq to link its southern oil fields, like Iraq’s northern oil fields, to the transit routes running through Turkey. This is all tied to Turkey’s visions of being an energy corridor and important lynchpin of transit.

The aims of re-routing oil away from the Persian Gulf would remove an important element of strategic leverage Iran has against Washington and its allies. It would effectively reduce the importance of the Strait of Hormuz. It could very well be a prerequisite to war preparations and a war led by the United States against Tehran and its allies.

It is within this framework that the Abu Dhabi Crude Oil Pipeline or the Hashan-Fujairah Oil Pipeline is being fostered by the United Arab Emirates to bypass the maritime route in the Persian Gulf going through the Strait of Hormuz. The project design was put together in 2006, the contract was issued in 2007, and construction was started in 2008. [8] This pipeline goes straight from Abdu Dhabi to the port of Fujairah on the shore of the Arabian Sea. In other words it will give oil exports from the U.A.E. direct access to the Indian Ocean. It has openly been presented as a means to ensure energy security by bypassing Hormuz and attempting to avoid the Iranian military. Along with the construction of this pipeline, the erection of a strategic oil reservoir at Fujairah was also envisaged to also maintain the flow of oil to the international market should the Persian Gulf be closed off. [9]

Aside from the Petroline (East-West Saudi Pipeline), Saudi Arabia has also been looking at alternative transit routes and examining the ports of it southern neighbours in the Arabian Peninsula, Oman and Yemen. The Yemenite port of Mukalla on the shores of the Gulf of Aden has been of particular interest to Riyadh. In 2007, Israeli sources reported with some fanfare that a pipeline project was in the works that would connect the Saudi oil fields with Fujairah in the U.A.E., Muscat in Oman, and finally to Mukalla in Yemen. The reopening of the Iraq-Saudi Arabia Pipeline (IPSA), which was ironically built by Saddam Hussein to avoid the Strait of Hormuz and Iran, has also been a subject of discussion for the Saudis with the Iraqi government in Baghdad.

If Syria and Lebanon were converted into Washington’s clients, then the defunct Trans-Arabian Pipeline (Tapline) could also be reactivated, along with other alternative routes going from the Arabian Peninsula to the coast of the Mediterranean Sea via the Levant. Chronologically, this would also fit into Washington’s efforts to overrun Lebanon and Syria in an attempt to isolate Iran before any possible showdown with Tehran.

The Iranian Velayat-90 naval drills, which extended in close proximity to the entrance of the Red Sea in the Gulf of Aden off the territorial waters of Yemen, also took place in the Gulf of Oman facing the coast of Oman and the eastern shores of the United Arab Emirates. Amongst other things, Velayat-90 should be understood as a signal that Tehran is ready to operate outside of the Persian Gulf and can even strike or block the pipelines trying to bypass the Strait of Hormuz.

The first Trans-Arabia pipeline designed to keep tankers out of Iran’s range.

Geography again is on Iran’s side in this case too. Bypassing the Strait of Hormuz still does not change the fact that most of the oil fields belonging to GCC countries are located in the Persian Gulf or near its shores, which means they are all situated within close proximity to Iran and therefore close Iranian striking distance. Like in the case of the Hashan-Fujairah Pipeline, the Iranians could easily disable the flow of oil from the point of origin. Tehran could launch missile and aerial attacks or deploy its ground, sea, air, and amphibious forces into these areas as well. It does not necessarily need to block the Strait of Hormuz; after all preventing the flow of energy is the main purpose of the Iranian threats.

The American-Iranian Cold War

Washington has been on the offensive against Iran using any means at its disposal. The tensions over the Strait of Hormuz and in the Persian Gulf are just one front in a dangerous multi-front regional cold war between Tehran and Washington in the broader Middle East. Since 2001, the Pentagon has also been restructuring its military to wage unconventional wars with enemies like Iran. [10] Nonetheless, geography has always worked against the Pentagon and the U.S. has not found a solution for its naval dilemma in the Persian Gulf. Instead of a conventional war, Washington has had to resort to waging a covert, economic, and diplomatic war against Iran.

Mahdi Darius Nazemroaya

Mideast Weapon Sales Part of Long-Term Plan: U.S.

The final days of 2011 saw the Obama administration finalize two important weapon sales with countries in the Middle East: a $3.48 billion sale of a Lockheed Martin-made missile defense system to the United Arab Emirates, and a $29.4 billion sale of Boeing-made F-15 fighter jets to Saudi Arabia.

While the announcements come as tensions between the United States and Iran continue to rise over a dispute regarding access to the Strait of Hormuz, the deals themselves are not meant to address current events, State Department officials said.

The F-15 deal was finalized with Saudi Arabia on Dec. 24. However, the White House first notified Congress of that sale, which includes 84 new aircraft and the modernization of 70 existing aircraft as well as missiles, spare parts, training, maintenance and logistics, in October 2010.

During a Dec. 30 State Department news conference, Andrew Shapiro, assistant secretary of state for political-military affairs, told reporters that the deal was not directed toward Iran, adding that work on the sale precedes the latest news out of the region.

"We did not gin up a package based on current events in the region," he said.

Over the last several weeks, the United States and Iran have stepped up the economic and military pressure on each other, with the latest threat coming from Iran, which warned the United States not to return one of its aircraft carriers to the gulf.

On Jan. 3, the Pentagon dismissed Iran's warnings.

"The deployment of U.S. military assets in the Persian Gulf region will continue as it has for decades," Pentagon Press Secretary George Little said in a statement. "Our transits of the Strait of Hormuz continue to be in compliance with international law, which guarantees our vessels the right of transit passage."

Meanwhile, Undersecretary of State for Political Affairs Wendy Sherman is on a four-day trip to Saudi Arabia and the UAE.

"While in the gulf region, she will consult with senior Saudi and Emirati officials on a wide range of bilateral and regional issues," according to the State Department. Her trip "further illustrates the robust strategic relationship the United States shares with both Saudi Arabia and the United Arab Emirates."

While the latest sales to the Middle East are being placed in this geopolitical context, the late December announcements are not tied to the escalating tensions, but part of a longer-term security plan, said Danny Sebright, president of the U.S.-UAE Business Council and a counselor at the Cohen Group, Washington.

"The overall sales with regard to both countries are definitely the result of a long-term concern with Iranian intentions, a long-term concern with wanting to improve individual countries' defense capabilities," Sebright said. "But, is the announcement of these two deals specifically tied to Iran? I would say no to that. I would say it's much more about internal decision-making in both countries - some with regard to terms and conditions of the sale, some with regard to budgeting, and some with regard to the Arab Spring."

According to Sebright, the United States gave the formal Letter of Offer and Acceptance to Saudi Arabia last spring and the Saudi government has been holding on to it until it was ready to sign.

"The basic deal had all but been done over a year ago, but they waited for internal and external reasons," he said.

A State Department official said, "While we decline to get into the specifics on the negotiations, the timeline here is not particularly atypical. A sale of this magnitude and complexity required close, continual consultations with our Saudi and industry partners to sort out the details."

Congress was first notified of the plan to sell UAE the Terminal High Altitude Area Defense System (THAAD) in September 2008. After negotiating the details of the contract, the United States and UAE signed the THAAD deal on Dec. 25. Lockheed Martin is on contract for four THAAD batteries for the U.S. Army, but the UAE deal is the program's first foreign sale.

Lockheed Martin's portion of the $3.48 billion sale is $1.96 billion. The overall deal includes two THAAD batteries, 96 missiles, two AN/TPY-2 radars, and 30 years of spare parts, support, and training to the UAE, according to the Pentagon.

Since the 2008 congressional notification, UAE trimmed the buy.

At first it was expected the country would buy three THAAD fire units, 147 missiles, and four radar sets for an estimated value of $6.95 billion.

The United Arab Emirates has asked Lockheed not to publicly discuss the delivery schedule of the weapon system, said Dennis Cavin, vice president of corporate business development at Lockheed Martin.

"This sale is an important step in improving the region's security through a regional missile defense architecture, and follows a number of recent ballistic missile defense-related sales," Little said in a Dec. 30 statement.

Sales from earlier in the year include a $1.7 billion direct commercial sales contract to upgrade Saudi Arabia's Patriot missiles and the sale of 209 Patriot GEM-T missiles to Kuwait, valued at about $900 million.

Loren Thompson, a defense analyst at the Lexington Institute, also put the sale in the context of December's announcement that Iraq would buy Lockheed's F-16s and Oman's decision to double the size of its F-16 fleet.

"When combined with the modernization of the Saudi Air Force and the extensive F-16 inventory of the United Arab Emirates, it is clear Arab gulf states will be positioned to greatly outmatch the antiquated tactical aircraft fleet of Iran," he wrote in a blog for Forbes.

According to Lockheed Martin, demand for missile defense capabilities continues to climb around the world.

"With regional threats in the Middle East and the uncertainties of what's going on in North Korea, demand for a very capable missile defense system has never been stronger," Cavin said. "The U.S. government is in discussion with a number of countries who have expressed interest in the THAAD, but we'd prefer that the Missile Defense Agency address any specifics with regard to which countries have contacted them."

The Missile Defense Agency declined to provide further details.

In announcing the Saudi deal, the State Department emphasized it would improve interoperability between the Saudi and American air forces.

In addition to greater cooperation with the United States, the sales also bolster internal cooperation among the Gulf Cooperation Council countries, which include Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE, Sebright said.

The gulf countries have taken more steps to improve internal coordination and work toward multilateral defense policies in the last year than they have over the last 25, he said.

Lockheed Wins Contract for UAE Anti-Missile System

Washington - The Pentagon awarded U.S. defense giant Lockheed Martin Corp. with a $1.96 billion contract Dec. 30 to supply the United Arab Emirates with a missile defense system.

Under the contract, Lockheed will deliver two Terminal High Altitude Area Defense or Thaad systems that include radar, interceptors and launchers, according to a Pentagon statement.

The project is part of President Barack Obama's plans to build up a regional defense in the Middle East to counter Iran's growing arsenal of ballistic missiles.

Under the plan, land-based interceptors would be tied in with a detection network on U.S. Navy Aegis-class warships.

UAE is the first country to purchase the expensive Thaad system.

The announcement came amid rising tensions with Iran and a day after the United States confirmed the signing of a $30 billion arms deal to provide another Gulf ally - Saudi Arabia - with 84 new fighter jets.

U.S., Saudi Arabia Finalize F-15 Fighter Deal

The U.S. State Department announced Dec. 29 that it finalized a $29.4 billion sale of Boeing-made F-15 fighter jets to Saudi Arabia.

U.S. AIR FORCE F-15 Eagles fly over Thailand during exercises in March. (Master Sgt. Cohen A. Young / U.S. Air Force)

"The United States and the Kingdom of Saudi Arabia have signed a government-to-government agreement under the Foreign Military Sales program to provide advanced F-15SA combat aircraft to the Royal Saudi Air Force," White House spokesman Joshua Earnest said in a statement.

The agreement was signed Dec. 24, according to the State Department.

The Obama administration first notified Congress of the sale, which includes 84 new aircraft and the modernization of 70 existing aircraft as well as missiles, spare parts, training, maintenance and logistics, in October 2010.

Delivery of the new aircraft will begin in early 2014, while upgrades to older models will start later in the year, according to the State Department.

The sale reinforces "the strong and enduring relationship between the United States and Saudi Arabia, and demonstrates the U.S. commitment to a strong Saudi defense capability as a key component to regional security," Earnest said.

With this sale, the two countries' air forces will become more interoperable, especially because they will train together on the aircraft, Principal Deputy Under Secretary of Defense for Policy James Miller said during a press conference.

According to Miller, 5,500 Saudi Arabian personnel will be trained through 2019.

It will also send a strong message to countries in the region that the United States is committed to stability in the Persian Gulf, Assistant Secretary of State for Political-Military Affairs Andrew Shapiro told reporters.

The timing of the announcement and the latest tensions between the United States and Iran in the Strait of Hormuz are not connected, according to Shapiro.

"This is not directed toward Iran; this is addressing Saudi Arabia's defense needs," he said, adding that work on the sale precedes the latest news out of the region. "We did not gin up a package based on current events in the region."

By law, the U.S. government must evaluate all sales to the region based on Israel's security needs. Having conducted that assessment, "We are satisfied that this sale will not decrement Israel's qualitative military edge," Shapiro said.

The Obama administration officials also emphasized the positive impact the sale would have on U.S. jobs.

According to the State Department, it will lead to 50,000 American jobs in the aerospace and manufacturing sectors. Boeing, the prime contractor, will work with over 600 suppliers in 44 states.

According to a recent report from the Congressional Research Service, Saudi Arabia has remained one of the top three purchasers of U.S. defense articles and services since 2003.

From 2007-10, the United States signed $13.8 billion worth in government-to-government sales agreements with the country.

Iran Wargames Start Near Strait of Hormuz

TEHRAN - Iran on Dec. 24 began 10 days of wargames around the Strait of Hormuz, a vital route in the Gulf through which more than a third of the world's ship-borne oil passes.

IRAN'S NAVY COMMANDER Adm. Habibollah Sayari points at a map during a press conference in Tehran on Dec. 22, saying that Iran will launch 10 days of naval drills on Dec. 24. (Hamed Jafarnejad / AFP via Getty Images)

The Velayat-90 military exercises, announced Dec. 22 by navy chief Adm. Habibollah Sayari, kicked off as planned, Iran's Arabic-language broadcaster Al-Alam reported. Iranian navy forces were being deployed throughout the wargame area to the east of the Strait of Hormuz, comprising the Gulf of Oman around to the Gulf of Aden, in the first phase of the exercises, Al-Alam said, citing navy command.

The exercises were taking place at a time of heightened tensions between Iran and the West, with sanctions being ramped up over Tehran's nuclear program.

The United States, which maintains its own navy presence in the Gulf, has noted Iran's drill. Tehran in September rejected a Washington call for a military hotline between the capitals to defuse any "miscalculations" that could occur in the Gulf.

The wargames were ordered as the United States and its allies ratchet up economic sanctions on Iran, targeting its oil and financial sectors. More measures were expected to be imposed in coming weeks. The sanctions have helped fuel a depreciation of Iran's currency, the rial.

A rumor that spread last Dec. 13 from an Iranian lawmaker's comments that Tehran was to block the Strait of Hormuz in the drill sent the rial to a new low and oil prices soaring before it was denied by the government.

While the foreign ministry said last week such drastic action was "not on the agenda," it reiterated Iran's threat of "reactions" if the current tensions with the West spilled over into open confrontation.

Most Western countries believe Iran is seeking nuclear weapons, despite Tehran's denials. Iran-U.S. tensions have also worsened over U.S. accusations of a thwarted Iranian plot to kill the Saudi ambassador to Washington, Iran's capture this month of a CIA drone, and Tehran's arrest and detention of an American-Iranian it alleges is a CIA spy.